June 23, 1977

Damage Claims Under the Atomic Energy Act

77-40 MEMORANDUM OPINION FOR THE

GENERAL COUNSEL, NUCLEAR

REGULATORY COMMISSION

This is in response to your request for our opinion concerning the 

effect of a floor amendment proposed by Senator Hathaway (Hathaway 

Amendment), and included in the Act of December 31, 1975, Pub. L. 

94-197, 89 Stat. 1111 (1975 Act), amending the Atomic Energy Act of 

1954, as amended. The provisions of that Act involved here are known 

as the Price-Anderson Act, 71 Stat. 576 (Sept. 2, 1957), incorporated in 

sections 2, 11, 53, and 170 of the Atomic Energy Act, 42 U.S.C. 

§§ 2012(i), 2014(j)-(u), 2073(e)(8), 2210 (Act).

You suggest that the Hathaway Amendment should be read to eliminate all provisions of the Price-Anderson Act that allow the reasonable 

costs of investigation, settlement, and defense of damage claims (costs) 

resulting from a nuclear incident to be absorbed from the various 

sources of funds that the Act makes available. For the reasons given 

below, we believe that costs are properly excludable only from the 

Nuclear Regulatory Commission’s (NRC) indemnity amount.

The Act establishes a complex scheme for meeting public liability 

claims arising out of accidents at nuclear reactor facilities. First, the 

Act limits the maximum aggregate liability for any single incident to 

$560 million. § 170(e); 42 U.S.C. § 2210(e) (Supp. V, 1975). Second, the 

Act requires each licensee to maintain “financial protection,” usually 

insurance, in an amount determined by the NRC, currently $125 million. Third, the Act provides that for awards in excess of the “financial 

protection” coverage up to the aggregate liability limit described above, 

the NRC will indemnify the licensee for the excess over the “financial 

protection” coverage. § 170(c); 42 U.S.C. § 2210(c) (Supp. V, 1975). 

Because the maximum aggregate liability is $560 million, and the currently required financial protection is $125 million, the maximum indemnity presently payable by the NRC is $435 million.

The Price-Anderson Act was extended and amended by the 1975 

Act. The 1975 Act provides for the establishment of a deferred premi157
um scheme that, over the course of time, will replace the NRC indemnity wiih one funded by the nuclear power industry.1 Thus, when the 

1975 Act is implemented, the funds available for paying public liability 

claims will be composed of (1) “financial protection” (insurance); (2) 

the deferred premium insurance scheme; and (3) the NRC indemnity. 

On the floor of the Senate, Senator Hathaway introduced an amendment to the 1975 Act that provided, with respect to the NRC indemnity, that costs were to be excluded in calculating the indemnity amount. 

Prior to this, the Act clearly provided that the costs of investigating, 

settling, and defending claims were included in the amount charged 

against the maximum liability—$560 million. No amendment was proposed expressly to exclude costs from the amount required to be covered by the financial protection provided by licensees and, indeed, the 

previous statutory language expressly including such costs was reenacted in the 1975 Act. Further, the provisions of the 1975 Act that added 

the deferred premium scheme to the Act, expressly included costs 

within the sum to be made up by deferred premium payments. Finally, 

no amendment was proposed to exclude costs from the maximum liability limits established under the Act. The Hathaway Amendment was 

adopted by the Senate and enacted into law.*

The literal result of the Hathaway Amendment is to provide that 

costs are to be excluded from that part of the maximum aggregate 

liability payable by the NRC and included for purposes of the financial 

protection and deferred premium plans. Thus, as the NRC’s exposure 

declines as the deferred premium plan assumes a greater part of the 

exposure, the aggregate amount payable to the public will decline, 

because a greater portion o f the amounts available within the aggregate 

liability limitation will be exposed to the payment of costs, which, as a 

result of the Hathaway Amendment, are not included in that portion of 

the aggregate liability limitation attributable to the NRC indemnity.

Although the words of the Hathaway Amendment changed the treatment of “costs” only with respect to the NRC indemnity, Senator 

Hathaway may well have intended this change to apply to all elements 

of the Act. In introducing his amendment, he described it as follows:

Quite simply, what this amendment does is to require that the 

entire resources of the $560 million fund—or whatever limit is 

established through the retrospective premium system—be used 

only for the purpose o f compensating people who are injured or 

sustain damages as a result of a nuclear accident. It amends several

1 U nder the deferred premium schem e, in the event of a nuclear accident that exhausts 

the licensees’ financial protection coverage, all licensees will, in effect, be assessed up to 

$5 million per facility as the deferred premium feature of the 1975 A ct takes effect. 

§ 170(b) o f the A ct; 42 U.S.C. § 2210(b) (Supp. V, 1975).

’ T h e am endm ent itself amended, inter alia, five sections o f the Act: § 170(c), 42 U.S.C. 

§ 2210(c) (Supp. V, 1975); § 170(d), 42 U.S.C. § 2210(d) (Supp. V, 1975); § 170(h), 42 

U.S.C. § 2210(h) (Supp. V, 1975); § 170(k), 42 U.S.C. §2210(k) (Supp. V, 1975); and 

§ 170(1), 42 U.S.C. § 2210(1) (Supp. V , 1975).

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provisions of the Price-Anderson Act which at present permit the 

payment of investigative costs, settlement fees, and defense costs 

out of the overall liability limit. My amendment specifically excludes these costs from any determination as to when the overall 

liability limitation has been reached. 121 Cong. Rec. S. 40966

(1975).

However, in a later colloquy with Senator Baker, the comanager of 

the bill, Senator Hathaway indicated that his amendment was not intended to change the existing practice of including costs within the 

amounts to be provided by financial protection (insurance).3

It is difficult to reconcile the inconsistency between Senator 

Hathaway’s statements about what he intended. An intent to exclude 

costs entirely from the liability limit is incompatible with including 

them in one of the three elements of that limit. In addition, the intent to 

exclude costs is incompatible with the pre-1975 language of § 170(e), 

which expressly included reasonable costs in the limit on liability. Yet 

the same language was reenacted by the very bill to which Senator 

Hathaway’s proposal was directed. § 170(e) of the Act. See also 121 

Cong. Rec. 40959 (1975). If Congress desired to require that costs 

might not be deducted from the limit on liability, it had only to strike 

from § 170(e) the language that authorized such deduction; instead, the 

same authorization was included in the revised § 170(e), which Senator 

Hathaway did not amend.

Still a third inconsistency is evident. The deferred premium scheme, 

the heart of the 1975 revision of the Price-Anderson Act, makes costs 

an element of the premiums themselves. Act, § 170(b). See also 121 

Cong. Rec. 40958-9 (1975). As with revised § 170(e), this language, too, 

was included in the bill both before and after adoption of the Hathaway 

Amendment. Finally, the 1975 extension continues in effect the existing 

definition of “financial protection,” specifically including the costs of 

investigation, settlement, and defense of claims. Act § 11 (k); 42 U.S.C. 

§ 2014(k).

Whatever may have been Senator Hathaway’s intention, Congress 

went forward and enacted the bill expressly excluding costs from the 

indemnity provision (as per the Hathaway Amendment) and expressly 

including costs in the deferred premium and financial protection provisions. Thus, even were it clear that the subjective congressional intent 

was to completely eliminate costs, it is unmistakably clear that its 

objective manifestation and the language chosen was insufficient to 

achieve the intended result; “legislative intention, without more, is not 

legislation” Train v. City o f New York, 420 U.S. 35, 45 (1975). As the 

Supreme Court noted in that case, legislative action can simply be

3 Mr. Baker: “T he cost o f the investigation ordinarily is charged against the insurance 

before it ever gets to the indemnity side. Is there anything in your [amendment] that 

changes that relationship?”

Mr. H athaway: “No.” 121 Cong: Rec. 40967 (1975).

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“inadequate” to its ends id. at 44, and, in our view, that is the case here, 

as the following review of the principles of statutory construction 

indicates.

The language of a statute is the prime indicator of legislative intent. 

Chief Justice Marshall, in one of his earliest opinions, said that a “law is 

the best expositor of itself’ Pennington v. Coxe, 6 U.S. (2 Cranch) 33, 52 

(1804), a rule that he stated more completely in The Paulina v. United

States, 11 U.S. (7 Cranch) 52, 60 (1812):

In construing [a statute] it has been truly stated to be the duty of 

the court to effect[uate] the intention of the legislature; but this 

intention is to be searched for in the words which the legislature 

has employed to convey it.

Accord, United States v. Wiltberger, 18 U.S. (5 Wheat.) 76, 94-95 (1820) 

(Marshall, C. J.). The rule no more than states the obvious. In interpreting a statute one must first look to the language that Congress employed. E.g., Flora v. United States, 357 U.S. 63, 65 (1958); A. Magnano

Co. v. Hamilton, 292 U.S. 40, 46-47 (1934); United States v. Standard

Brewery, 251 U.S. 210, 217 (1920); United States v. Union Pacific R. Co.,

91 U.S. 72, 79 (1875).

There is, of course, no more persuasive evidence of the purpose of 

a statute than the words by which the legislature undertook to give 

expression to its wishes. Often these words are sufficient in and of 

themselves to determine the purpose of the legislation. In such 

cases we have followed their plain meaning. United States v. 

American Trucking Ass'ns Inc., 310 U.S. 534, 543 (1940).

This is not to say that other meanings may not be attributed to ambiguous or contradictory statutory phrases. Where that is the case, resort to 

the rules of construction or to implications which may be found in 

legislative history are of course appropriate. But “[w]ords used in a 

statute are to be given their ordinary meaning in the absence of persuasive reasons to the contrary. . . .” Burns v. Alcala, 420 U.S. 572, 580- 

81 (1975).

Applying this rule, we note that the language of the revised PriceAnderson Act is clear and unambiguous concerning “costs” and the 

limit on liability; § 170(e) o f the amended Act includes costs within that 

limit in unmistakable terms. To impose a contrary interpretation on the 

Act, despite the words of § 170(e), would amount to a finding that the 

section has been amended by necessary implication from the indemnity 

portions of the Act that were more directly changed by Senator 

Hathaway’s amendments. Repeal and amendments by implication are 

strongly disfavored. Amell v. United States, 384 U.S. 158, 165-166 

(1966); Silver v. New York Stock Exchange, 373 U.S. 341, 357 (1963); 

Mercantile Nat. Bank v. Langdeau, 371 U.S. 555, 565 (1963); United

States v. Borden Co., 308 U.S. 188, 198-99 (1939). A new statute will 

not be treated as amending portions of an older one, not mentioned in

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the former, unless there is a positive repugnancy between the two, 

Regional Rail Reorganization Act Cases, 419 U.S. 102, 134 (1974), and it 

cannot be suggested that the various provisions of the revised PriceAnderson Act cannot be harmonized. We find no irreconcilable inconsistencies or absurdities of result if the Act be taken on its face and 

given its open and obvious meaning.

It is a “well-settled rule of statutory construction that all parts of a 

statute, if at all possible, are to be given effect.” Weinberger v. Hynson,

Westcott & Dunning, Inc., 412 U.S. 609, 633 (1973); Jarecki v. G. D.

Searle & Co., 367 U.S. 303, 307-308 (1961); D. Ginsberg & Sons, Inc. v. 

Popkin, 285 U.S. 204, 208 (1932). To accept your view of the revised 

Price-Anderson Act would mean that not only would such sections of 

its text as, for example, the definition of “financial protection,” be given 

no force, but that many of its provisions must be read directly contrary 

to their terms. Where the statute sets an upper limit on all public 

liability from a nuclear incident, we would see only a limit on payments 

to claimants, disregarding all costs.

So drastic a reversal of the ordinary meaning of the statutory language cannot be supported by the meager evidence of a single statement by the proponent of an amendment, itself at odds with his later 

words and the terms of his amendment. We have been unable to 

discover in the legislative record any showing of a congressional—as 

distinct from individual—purpose to change the inclusion of costs 

within the limit on liability. Upon the available record, we simply 

cannot conclude that Congress, by accepting Senator Hathaway’s 

amendment concerning the treatment of costs under the Governmental 

indemnity, intended to make a similar change in their separate treatment under the limit on public liability.4

Nor do we find support for the view that costs are now excluded 

from financial protection insurance and deferred-premium payments, 

despite the explicit statutory language that includes costs in those 

amounts. It could not be contended, for example, that the inclusion of 

costs in financial protection insurance was an obscure or hidden matter. 

It is evident on a single reading of the definition of “financial protection,” § ll(k), 42 U.S.C. § 2014(k), and is accepted by insurers, licensees, and the Commission alike. Reenactment of a statute that has acquired a settled significance ordinarily adopts that meaning in the absence of a plain indication to the contrary. Heald v. District o f Columbia, 254 U.S. 20, 23 (1920). We should point out that with respect to 

financial protection, even Senator Hathaway’s own intent is ambiguous. 

His reply to Senator Baker, supra, denies any purpose to alter the 

existing relationship between indemnity and financial protection, in

‘You suggest that the trade press and certain staff members o f the Joint Com mittee on 

Atomic Energy understood the Hathaway Amendment to exclude costs from all parts of 

the Price-Anderson scheme. Such “sources” for determining legislative intent hardly 

suffice to enable one to decide that when Congress used the w ord “including” it really 

meant “excluding.”

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which “costs” were subtracted from that insurance coverage before the 

indemnity could be reached.

Thus, we find no basis for concluding that Congress has altered the 

meaning of § 1 l(k)—including costs as an element of the term “financial 

protection”—or that Congress intended to abrogate existing insurance 

contracts that, we understand, similarly provide that the insurer’s liability for costs and claims is limited to the required amount of financial 

protection.

We are likewise unable to conclude that the 1975 revision to the 

Price-Anderson Act has mandated an exclusion of costs from the deferred-premium element of its system. To do so would be to contradict 

the explicit language of § 3 of the 1975 Act. Section 3 expressly includes costs in ascertaining the amount of deferred premiums against 

nuclear licensees.

It is suggested that somehow the Supreme Court’s recent decision in 

Train v. Colorado Public Interest Research Group, Inc., 426 U.S. 1

(1976), provides a basis for concluding that when Congress used the 

word “including” it intended the word “excluding.” In that case, the 

Supreme Court held that the words “radioactive material” in the Federal W ater Pollution Control Act did not include source, byproduct, or 

special nuclear materials, all of which were already regulated under the 

Atomic Energy Act, and that the courts could properly consider traditional legislative history materials in construing the words of a statute, 

even where the statutory words themselves may seem to be clear on 

superficial examination.5 In that case, however, the House report, the 

Senate debates, and the conference report all indicated clearly that 

source, byproduct, and special nuclear materials were not intended to 

be within the statutory definition of “radioactive material.” Thus, the 

available legislative materials in that case were substantially different 

from the inconsistent statements of Senator Hathaway here present. 

Moreover, a determination that “radioactive materials” does not mean 

“all radioactive materials,” is substantially different from a determination that “including” means “excluding.”

Finally, it is suggested that “policy” considerations support the view 

that the Hathaway Amendment should apply even to the unamended 

portions of the Act. The policy principle cited to support this view is 

that the licensee is to be responsible for providing financial protection 

to the public. Unfortunately, the Price-Anderson Act attempts to reconcile several conflicting policies, of which the principle noted above is 

only one. Others include providing protection to the public and a 

financial source from which damage awards may be paid, and the 

perceived need to protect the nuclear power industry from unlimited or 

“unaffordable” liability—a policy evidenced in the maximum liability 

limitations of the Act. That policy perhaps supports the view that, at 

least with respect to that portion of the maximum exposure that is the

5 Train, supra, at 9-11, 24-25.

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responsibility of the licensees, costs were intended to be included so 

that the maximum exposure could be determined with certainty.

In short, we conclude that the Price-Anderson Act, as amended, 

excludes the costs of investigation, settlement, and defense of claims 

under the remaining Federal indemnity. The 1975 revision of that Act 

did not change the treatment of those costs under either the overall 

limit on public liability arising from a single nuclear incident, the 

financial protection insurance required of licensees, or the industryfunded deferred-premium elements of the statutory compensation 

system.

J o h n M . H a r m o n

Acting Assistant Attorney General

Office o f Legal Counsel

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